What Is Power of Sale in Ontario?

Let’s answer the big questions right off: What is Power of Sale?

What does Power of Sale mean?

In Ontario, “Power of Sale” is a legal remedy written into most standard mortgage agreements. It gives the lender (mortgagee) the right to sell the property if the borrower (mortgagor) defaults, without going through a full court foreclosure process. So, they are NOT the same thing as most people think.

If you must sell your home, you might as well get the best possible results. Start by downloading The Insider’s Guide To Selling. It’s a must-have resource, and it’s free!

A Recourse for Mortgage Lenders

Power of Sale means your lender can list and sell your home to recover what they’re owed if you stop honouring the mortgage contract.

Key points:

It’s faster and cheaper for lenders than foreclosure.
The property still legally belongs to the homeowner up until it’s transferred- but the lender controls the sale process once Power of Sale is triggered.

After the sale:

The lender gets paid what they’re owed first (principal, interest, legal and selling costs ex- real estate fees).
Any remaining money goes back to the homeowner.
If there’s not enough to cover the debt, the lender can still legally go after the borrower for the shortfall.

Do you want more real estate education to help protect your transaction? Start with the related posts below:

How Does Power of Sale Work in Ontario? Step-By-Step

Process details can vary slightly by lender and contract, but here’s the general flow under Ontario’s Mortgages Act (this is information from experienced Realtors, it is NOT legal advice):

Missed mortgage payment(s)

Typically, once you’re in default (often after one or more missed payments), the lender can start the clock.

Notice of Sale is issued

The lender serves a Notice of Sale to you and to any other registered parties on title (second mortgagees, lienholders, etc.).

This notice gives you a redemption period- often 35 to 40 days- to bring the mortgage back into good standing (pay arrears, fees, etc.).

Redemption period

If you catch up during this period, Power of Sale stops.
If you don’t, the lender can proceed to list the property for sale.

Property is listed for sale

The lender typically hires a Realtor and markets the property to get fair market value. They can’t just dump it for pennies (that was the old days) ; they must act reasonably to protect everyone with an interest in the property.

This is often when you’ll see “Power of Sale” or phrases like “seller’s schedules to accompany any offer”, “as is, where is”, “no warranties”, etc. in the listing remarks.

Offer process & sale

Buyers submit offers, usually with conditions similar to any other resale transaction (financing, inspection, lawyer review). The lender/seller picks the best one.

On closing, the lender pays:

Real estate commissions
Legal and sale costs
Their outstanding mortgage balance and interest
Shortfall or surplus
If there’s money left over, it goes back to the homeowner.

If there’s a shortfall, the lender can pursue the borrower for the remaining amount (and other creditors may still be there waiting as in our example from our last blog).

The best way to overcome a Power of Sale situation is to avoid it in the first place. Selling in advance will help, as will the posts below:

How Long Does Power of Sale Take in Ontario?

There’s no single exact number, but a typical range looks like this:

From first missed payment to Notice of Sale: 1 to 3 months (varies by lender and contract).
Notice of Sale redemption period: usually 30 to 40 days.
Listing, offer, and closing: often another 60 to 90 days, depending on the market. More like 120+ lately for many listings (not ours lol)

All in, you’re often looking at somewhere in the 3 to 6 month range from initial trouble to closing a Power of Sale transaction, but it can be faster or slower depending on:

How quickly the lender moves
Market conditions (days on market)
Whether buyers back out, financing or inspection fails, etc.

How to Buy Power of Sale in Ontario (Without Getting Burned)

If you’re on the buying side, the search term you’re likely typing is: “how to buy Power of Sale in Ontario“.

Here’s the honest rundown:

Treat it like a more complicated regular purchase

A Power of Sale can sometimes be priced aggressively to move, especially if the property needs work or has been sitting. But:

The lender hasn’t lived there.
They typically won’t give the same disclosure as an owner/occupier.
They’ll often insist on “as is, where is” wording.
You need to lean extra hard on due diligence.

Keep your conditions- but make them clean

We strongly recommend:

Financing condition– because lenders scrutinize these properties carefully.
Home inspection– to catch hidden issues that could erase any “deal”.
Lawyer review of the agreement and title– this is non-negotiable in our book.

The lender’s lawyer will usually add schedules that limit the lender’s liability (no representations or warranties, etc.). Your own lawyer needs to look at that language and at title, liens, and execution searches. We recently backed out of a Power of Sale deal because of a schedule that was just crazy for a buyer to consider.

Have your financing ducks in a row

Lenders will want to know:

You’re solid financially
Your down payment is verified
You’re not going to fall apart at the first sign of an appraisal surprise where you have to make up a shortfall if needed

Being pre-approved and working with an experienced mortgage broker who “gets” Power of Sale deals is huge.

Planning to buy? First, check out the informative posts below:

How to Find Power of Sale Homes in Ontario

We are frequently of late asked this question: “how to find Power of Sale homes in Ontario”.

The real answer is that there is no secret website with all the deals that only the chosen few get to see.
Here’s how it actually works:

MLS® / REALTOR.ca

Power of sale listings show up in the same place as everything else.

The trick is in how they are described:

“Power of Sale” in remarks
“Seller schedules to accompany all offers”
“As is, where is”

Work with a REALTOR® who watches for them

We set up custom searches for Power of Sale-style language and flag those listings as soon as they hit the system.

We also watch for red flag language that might indicate early distress, even if “Power of Sale” isn’t yet mentioned.

Bank and law firm channels

Some lenders and law firms publish or circulate distressed or lender-controlled properties. They’re often still sold via Realtors, but early awareness helps.

Local Expertise Matters

In Barrie, Oro Medonte, Springwater, Innisfil and the broader Simcoe County market, we know which price ranges, property types and neighbourhoods are more likely to see stress as renewals hit.

That context helps us guide buyers away from landmines and towards smart opportunities.

How to Stop Power of Sale in Ontario (If You’re the Homeowner)

Now let’s flip to the other side of the equation: “how to stop Power of Sale Ontario”.
If you’re a homeowner in trouble, there are options- but timing is critical.

Talk to your lender early

The biggest mistake we see is silence.
If you know your renewals or payments are going to be a problem:

Call your lender or mortgage broker and ask about:

Extending amortization
Blending and extending rate
Moving from variable to fixed
Temporary payment relief, if available

Lenders generally don’t want to take your home. Power of Sale is costly and a time consuming hassle for them, too.

Explore a refinance before things snowball

If you still have equity and relatively decent credit, a refinance might:

Consolidate higher-interest debt
Lower your overall monthly obligations
Buy time while rates (hopefully) stabilize

Always run the numbers carefully and get independent advice; you don’t want to fix today’s problem by creating a larger one two years from now.

Consider selling before Power of Sale is triggered

This is where a team like The Weeks Group comes in.

If we can list your home before Power of Sale formally kicks in:

You stay in control of the process.
You can aim for top market value rather than a “must sell” scenario.
You’re more likely to protect your equity and walk away with a clean slate.

Remember our short sale blog story? That seller waited too long and let debt stack up. By the time the numbers were uncovered, there was almost no path out that didn’t involve someone getting hurt.

Early action is everything.

Legal and insolvency advice

If you’re already in deep:
A real estate lawyer can explain your rights and timelines under the Mortgages Act.

A licensed insolvency trustee or credit counsellor can walk through:

Consumer proposals
Bankruptcy
How these options interact with your home and mortgage

This is beyond the scope of a blog- but it’s crucial to get proper advice, not just Google bits of info.

How Power of Sale Ties Back to Short Sales

Power of sale and short sales are cousins:

In a Power of Sale, the lender drives the process and sells the home, then chases any shortfall.
In a short sale, the homeowner is the seller, but the lender must agree to accept less than the full amount owing on the mortgage.

In our previous Barrie short sale-adjacent story:

The seller wanted to close a regular sale even though the mortgages + liens exceeded the sale price.
Without lender and creditor approval, that wasn’t realistically going to close.

The file was flirting with both short sale territory and eventual Power of Sale if payments aren’t being made.

For our buyers, we:

Pulled the parcel register
Flagged the multiple mortgages and liens
Recognized that the “plan” didn’t make legal or financial sense
Walked away and protected them from a huge headache

That’s the kind of deep due diligence you want on any distressed property- whether it says “short sale”, “Power of Sale” or nothing at all.

Thinking of Buying or Selling Around a Power of Sale?

Whether you’re:

A buyer wondering how to buy Power of Sale in Ontario safely
An investor trying to find Power of Sale homes in Ontario without stepping into a money pit
A homeowner who’s stressed about renewal and trying to stop Power of Sale before it starts

…you don’t have to navigate this alone.

The Weeks Group works in the real, messy details every day:

Reading parcel registers and title searches
Spotting problematic liens and stacked mortgages
Helping sellers exit tough situations with dignity and as much equity intact as possible
Guiding buyers towards smart opportunities and away from “too good to be true” traps

If you’re in Barrie, Oro-Medonte, Springwater, Innisfil or the surrounding Simcoe County communities and have even a hint that renewal or payment shock might become a problem, reach out before it does.

Our Barrie real estate agents are happy to sit down, review your situation, and help you build a plan, whether that means staying, selling, or buying your next place from a position of strength.

Call today at 705.305.4174 or email hello@weeksgroup.ca to begin.

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What Is Power of Sale in Ontario?

A Recourse for Mortgage Lenders